Govt seeks to improve child support provisions

The
government is looking at ways of improving the child support
scheme to make it more responsive to factors such as the
complexities of shared care, the income levels of both
parents and the costs of raising children, Revenue Minister
Peter Dunne said today.

“These are the most commonly
identified areas of concern of the many people who write to
me and to other MPs about their child support problems,”
Mr Dunne said.

“The standard formula for assessing the
amount of child support to be paid by a liable parent is
straightforward, easy to understand and in most cases
provides certainty for both parents.

“However, it is
solely based on the economic circumstances of the liable
parent and his or her ability to provide financial support
for the child involved. It does not take into account the
income of the principal carer of the child.

“Nor does
the formula take into account all the parental circumstances
surrounding the shared care of children and the associated
costs of raising them, and at different ages.

“It is
timely to reassess the formula, to ensure that it is
flexible enough to reflect the complexities of raising
children when the parents are separated and both parents
contribute to the care of their children.

“Since the
current child support scheme came into being in 1992, there
have been many changes in New Zealand society that make it
timely to reconsider aspects of child support law.

“For example, family law now places far greater
emphasis on both parents being actively involved in their
children’s lives and sharing responsibility for their
welfare.

“Moreover, more women are now in the
workforce, which has undoubtedly led to the more active
involvement of fathers than occurred in the past.

“Many
liable parents consider the current assessment of child
support liability to be unfair.

“In trying to retain a
significant role in their children’s upbringing they incur
considerable costs in providing for them during what are
often significant periods of contact, although those costs
are not recognised under the standard child support formula.

“Some say those costs affect their ability to make the
child support payments required of them, placing strain on
other financial commitments.

“Ultimately, however, both
parents are responsible for supporting their children, and
it is the child’s interests that must predominate.

“I
have asked my policy officials to examine a number of
options for updating the child support system to deal with
these and related concerns.

“One option is to make
relatively minor changes to the existing definition of when
the care of a child is shared – at present, to share care
‘substantially equally’ a liable parent must care for
the child or children for at least 40 percent of nights –
or if less, prove that he or she meets the shared care test
in specified other ways. This is one of the most
contentious features of the child support scheme.

“To
make things easier, the wording of the definition could be
amended to extend the specified circumstances in which
liable parents who do not meet the 40-percent-of-nights test
but who do undertake significant care of their children on a
daily basis can have the associated costs recognised.

“A
second option is to reduce the shared care threshold from 40
percent of nights, which would allow a greater number of
liable parents to benefit from the shared care provisions
and pay less in child support.

“A third and more
fundamental option than changing the shared care provisions
is to adopt an approach that takes account of both
parents’ income as well as the costs of raising children.
Such an approach has recently been adopted in Australia and
is in use in Norway and part of the United States.

“The third option is a more complex way of assessing
child support liability because it involves taking into
account the costs of raising children as a percentage of
parents’ combined income.

“Both lowering the
40-percent-of-nights shared care threshold and adopting an
approach based on joint parental income and the cost of
raising children would require a great deal of information,
much of which is very hard to come by.

“It is expected
that some of the necessary information will result from the
current Families Commission survey of 10,000 people – a
sample of recipients of Working for Families, recipients of
child support, and payers of child support. The survey is
looking at patterns of post-separation care of children and
the costs of raising children.

“Initial research results
are expected in June and should help in the consideration of
the options for ensuring a more flexible approach to
recognising separated parents’ contributions to the care
of their children.

“I hope that by next year the
government will be in a position to present for
consideration some soundly based proposals for improving the
system.

“All decisions on child support liability are a
question of finding a balance between competing interests.
For every liable parent who pays less in child support there
is a custodial parent who will receive less in child support
payments.

“Although it is impossible to come up with
child support rules that will satisfy all separated parents,
the government wants to devise rules that will meet the
concerns of a greater number of separated parents than the
current rules do,” Mr Dunne said.

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